Bridget McKenzie has refused to apologise for her handling of a sports grants program, which has been described as "rigged", after an audit report found was used to help win election in marginal seats.
Speaking to ABC radio on Thursday morning, the Wodonga-based senator maintained that her recommendation of grant recipients as then sports minister was "appropriate" because the projects had been approved by Sports Australia.
Other applications from safe federal seats, also approved by Sports Australia, missed out.
Senator McKenzie did not rule out using the same funding method again.
"As the ANAO report confirms, no rules were broken," she said.
"I will continue to use taxpayer's funds appropriately and distribute it according to the approved guidelines."
She chose to focus on recommendations to Sports Australia, which the auditor-general said should have strategies to manage the expected demand for funding and declare when employees were involved in the funding program.
"They've accepted those and taken very swift action in looking their their internal processes," Senator McKenzie said.
"Ministerial discretion was actually written into the guidelines for a purpose and what that actually meant was that there were more projects supported and funded in Labor seats than if that ministerial discretion hadn't been deployed."
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The report found that instead of choosing programs based on work done by Sport Australia, Senator McKenzie's office used a parallel assessment process.
Auditor-General Grant Hehir also recommended the federal government put in "advising, decision-making and reporting requirements" when ministers make funding decisions for corporate organisations like Sports Australia.
This recommendation was just "noted", but not "accepted".
"This is a great program that's making a great difference in communities right across the country, irrespective of who represents them," Senator McKenzie said.
Nine of the 10 electorates approved to receive the most money were either marginal seats or ones being eyed by the Coalition.
These seats would have received less funding if Sports Australia merit assessments had been used.
Former Indi MP Cathy McGowan complained to the Australian National Audit Office, after more than $3 million worth of federal grants were hidden from her during the election campaign, including the February announcement of $205,000 to upgrade lighting at Martin Park.
She told The Border Mail on Thursday some sporting clubs had been funded for projects that were even part of their plans.
"The thing that really concerns me is all those community groups that put in applications in good faith, to now know that the whole system was rigged," she said.
"It's all volunteers who do hours and hours and hours of voluntary work.
"I feel incredibly sorry for them that they can't trust government to do what it says it's going to do.
"Particularly in Indi because we got a huge amount of money out of that program."
Nationals candidate Mark Byatt was regularly by Senator McKenzie's side during announcement of government grants, not just promises, while Ms McGowan was not invited as the sitting MP.
Ms McGowan was queried by individuals who were concerned by how sporting grants were being worked out in the lead up to the election.
She said it was another example of why the country needed a national integrity commission.
"The government needs to step up, it needs to show the people of Australia that it takes integrity seriously," she said.
Labor has called for Senator McKenzie to resign over her role in allocating the funds.
Opposition frontbencher Tony Burke said he's never seen an auditor-general's report with such a finding.
"It wasn't even her money to misappropriate," he told ABC radio.
"And they did anyway. This says everything about Scott Morrison."